I am no musician, so I have to rely on the site http://www.proz.com
so from one answer the key could be expressed as "clave" or "tonalidade".
So, in the key of C major would be translated into "clave no tom de Dó Maior", being that there are twelve keys (tons) in music.
To "sing on key" would be that a singer "tunes" her/his voice perfectly to a key, so he is "afinado" (naquele tom que se está tocando).
That´s a praise to a singer, but not every time perfection is the thing, sometimes a singer may not sing on key and connect with the audience. Whereas if he/she sings the same music on key perhaps they don´t Wow